Good news on the Home loan front. President Barack Obama has signed HR 2112! Oh, you don’t know what that means? Trust me it’s exciting.

Here, let me quote you!!

FHA maximum Loan Limits effective October 1, 2011 through December 31, 2012 – Mortgagee Letter 2011-39

 FHA Loan Limits that were in effect from January 1, 2011 through September 30, 2011, as announced in ML 10-40, shall apply for case numbers assigned from November 18, 2011 through December 31, 2011 – Maricopa County $346,250

 FHA Loan Limits with case numbers assigned on or after January 1, 2012 through December 31, 2012 will remain the same as those that were in effect from January 1, 2011 through September 30, 2011 – Maricopa County $346,250

 FHA Loan limits with case numbers assigned before November 18, 2011 are subject to the LOWER limits that were in effect from October 1, 2011 through November 17, 2011 (some exceptions apply) – Maricopa County $271,050

So what does all of that mean?

Moral of the story is:  FHA Case #’s assigned Jan 1, 2011 through September 30, 2011 maximum loan limit for Maricopa County was $346,250 –

Case numbers assigned October 1, 2011 thru November 17^th, 2011 are subject to the REDUCED loan limits of $271,050 for Maricopa County – And yet another change FHA Case numbers assigned November 18^th, 2011 thru December 31, 2011 will jump back up to $346,250

Basically, you can borrow more under FHA….

Don’t you love how long it took them to say what I said in seven words?

Stay Tuned for more FHA changes.  Please call Jeannie Bolger, Sr. Loan Officer – Nova Home Loans if you have questions. 

Exciting Right?

This just in from the desk of my friend Jeannie Bolger, of Nova Home Loans:

There were some changes other than weather as of October 1^st this year. For those of your looking to buy a home, there were several mortgage changes effective last Saturday.

For those looking into FHA (Federal Housing Administration) loans the maximum loan has been reduced state wide. As you may recall, in 2008 a temporary boost to Federal Housing Administration-guaranteed loan was passed. That boost expired October 1^st and

In Maricopa County new loan limits are:

Anyone looking into VA Funding has noticed a decrease, sometime more than a full % for purchases, on funding fees.  Across the board these are positive changes, as the VA loan is already perhaps the best loan option available for today’s veterans and active duty service men and women.

Regular Military Funding:

Reserves and National Guard:

Beginning October 1, 2011, USDA Rural Loans have annual mortgage insurance (3%, paid monthly) and reduced the upfront guarantee fee on purchases from 3.5% to 2%. Unlike FHA insured loans, USDA’s annual insurance fee is for the lifetime of the loan, which is definitely something to think about when considering loans.

Loans can be complicated, but they don’t have to be. Contact Jeannie at (602) 385-4812 today for help.

And, of course, give me a call at 602-456-9388 for property questions.

You’ve heard me ramble on about how great it is to live in Central Phoenix. It’s the truth! CenPho is the place to live and offers residents so much that other cities just don’t offer.

But, check this out. Here’s another reason you should consider moving in to CenPho if you are not already here: a long commute may increase your chances of divorce by 40%. Really.

One recent study in particular conducted by the Umea University in Sweden showed that there was a large increase in the risk of divorce with an increased commute.

OK. I’m being a little facetious. But there is probably some truth here. The two hours you are NOT travelling to and from work you could spend with your main squeeze at the Phoenix Art Museum, or one of the upteen thousand new restaurants downtown.

One thing the study does not mention is the importance of the aesthetic on our lives. Even though Phoenix has torn town waaay too much of its architectural heritage, what’s left still gives people something that the burbs can’t –a sense of space and identity.

A sense of history really brings out the artistic side of people with architecture and individuality when it comes to homes and businesses.

The various cultures and demographics of everyone living in CenPho make it so unique and lively that there is something for everyone. I’m constantly reminded of Richard Florida’s book The Rise of the Creative Class.  Its kinda old news now. Remember when he came to Phoenix in about 2003 to speak and we filled up the Orpheum? Much of what he said has held true, despite the economic downtown

1) If you build an organic (versus top-down) community, the creative class will come.

2) Areas with dense urban centers and creative outlets survive economic downturn better than other areas.

This is true of Phoenix. We saw it ten years ago and we see it today.

I’m just sayin’.

I’ve had first time home buyer clients who are frustrated by how much distressed property there is in the market. They can’t afford a renovated home, but they can’t afford to fix up the property on their own.

Well, there is an answer.

The U.S. Department of Housing and Urban Development (HUD) offers homebuyers the opportunity to secure a loan known as a 203(k) loan. This loan is administered through the Federal Housing Administration (FHA) and gives homebuyers the necessary funds to rehabilitate a home.

Many times, a bank will be hesitant and may reject lending money when the home is not habitable. This is where the 203(k) loan comes into play and can help homebuyers obtain the necessary funds to not only buy the home but to purchase the necessary upgrades to make it habitable.

This loan is an incredible opportunity and is coming into play more now than ever since the housing market took a dive. With many people facing foreclosure, they stripped their house of everything that wasn’t, or was, bolted down leaving the house a complete disaster. This loan gives homebuyers the chance to come in and fix up the house.

This does two things: 1) increases the value of the home and surrounding area and 2) boosts the economy of the community by having another family living and buying in the area.

My friend Jeannie Bolger, of Nova Home Loans is well versed in helping you get these “fixer-upper” loans. Jeannie has been trained to help guide clients through the entire process.

But as with any mortgage, there are some criteria both the homebuyer and the home must meet:

1)      The homebuyer must meet FHA financing guidelines which means a FICO score of 640 or more and a debt to income ratio of 31/43 (see FHA for more info)

2)      The home must be the primary residence

3)      For the home to qualify, it must be existing for more than one year

4)      The work must be completed by a Licensed General Contractor – sorry do-it-yourselfers

5)      Work starts after you close on the home and must be completed within 6 months

There are also two types of 203(k)s that homeowners can choose from depending on the extent of the work required:

1)      Streamline 203(k) – this includes uncomplicated repairs and improvements to home up to $35,000 and no more than 2 subcontractors needed for entire project

2)      Standard 203K – this is for major repairs and improvements along with structural improvements to property exceeding $35,000 – up to 6 months PITI (principle, interest, taxes and insurance) can be included in mortgage if property cannot be occupied during construction. A Licensed General Contractor is needed if layered work is involved

These 203(k) loans are a great way to get our housing market back up and running. With a wide selection of homes in the Central Phoenix area, there is something for everyone.

And don’t forget, the Realtor, Lender, HUD Consultant and Contractor will hold your hand throughout the WHOLE process.

If you would like more information on the 203(k) loan, or just on homes in CenPho, give me a call today at 602-456-9388.

If I have to hear another person predict a massive “shadow inventory” I’m going to turn green, and you wouldn’t like me when I turn green.

Well, not really green, more like red with some veins popping out on my forehead and my head spinning around.

So what am I talking about? Well, I’m a news junkie and when I hear every pundit on TV prattle on about  a shadow inventory, like its the forthcoming of the “four horsemen of the house-pocolypse,”  Where is the data to back it up? If they were looking at the same data as I am, then they wouldn’t be saying this nonsense.

I mean, come on, just do some quick research and see for yourself. The Cromford Index is the best guide out there and comes directly from the MLS as well as the county court and recorder’s documents. I would say those are just a teensy bit credible, I mean after all, they take the information directly from sales, right?

Yeah, that’s what I thought.

So what exactly is a shadow inventory? At its core, shadow inventory refers to properties, which are on their way to foreclosure or are already foreclosed that have not yet been sold or put on the market (for whatever reason, we don’t know).

Well, here is why there will be no shadow inventory in the Phoenix area:

1)      A house will not be part of any inventory of foreclosed homes until it has been given a foreclosure notice (see “Pending Foreclosures” on the graphs below). Even if it is a short sale, it probably has a foreclosure notice pending, so it is likely part of the big purple area below. A foreclosure notice is when the bank sends you a note to say, “Dearest customer. We noticed you stopped paying your mortgage. While we love you very much, we will throw your sorry butt out on the street by such and such date unless you pay up. Signed, Your Favorite Bank.”

(Click on graphs to enlarge)

That’s it. That is all there is. You could try to argue that more homes are going to go in to foreclosure because the economy is going to go in to a double-dip recession, but it is waaaay too early to predict that. Further, the foreclosures are going down because the market is clearing of those properties that were purchased at the peak of the market. There are just fewer of them now.

So, please. Tell your friends. Tell your family. Tell your neighbors and strangers whom you don’t even know.

Let’s put this shadow inventory myth to bed for good…

If you are buying a house, this means the inventory is dropping and prices are going to go up. So, don’t delay. If you are looking to sell a house, times are getting better for you. Either way, call me at 602-456-9388.